Congressional Budget Office

Background Paper

the congress of the united states

Utilization of Tax Incentives for

Retirement Saving:

Update to 2003

March 2007
Pub. No. 2944
The Congress of the United States O Congressional Budget Office

CBO

Utilization of Tax Incentives for 

Retirement Saving:

Update to 2003

March 2007
Notes

All years are calendar years.

Numbers in the text and tables may not add to totals because of rounding.
Preface

This Congressional Budget Office (CBO) background paper is the second update 

of Utilization of Tax Incentives for Retirement Saving (August 2003). That paper examined participation rates and contributions to employment-based retirement plans, 

individual retirement accounts (IRAs), and self-employed plans in 1997. Every third 

year, CBO processes the same data sources used for that paper to project taxable distributions from pensions, annuities, and IRAs for its revenue baseline. With that new 

data, CBO also can update this series triennially. The first update, released in February 2006, presented comparable figures for 2000. This paper presents figures for 

2003, and it analyzes the implications of certain provisions in the Economic Growth 

and Tax Relief Reconciliation Act of 2001 (EGTRRA) that increased the limits on 

contributions to tax-favored retirement plans. In keeping with CBO’s mandate to provide objective, impartial analysis, the report makes no recommendations.

Overall, participation in tax-favored retirement plans remained stable between 2000 

and 2003. The slight increase in 401(k) participation was offset by a small dip in IRA 

participation. The EGTRRA provision that affected the largest number of IRA participants was the increase in the general contribution limit from $2,000 to $3,000, 

which allowed an additional 12 percent of participants—1 percent of all workers—to 

contribute as much as they wanted. The provision that affected the largest number of 

401(k) participants was the introduction of $2,000 “catch-up” contributions for those 

age 50 and over. 

Paul Burnham of CBO’s Tax Analysis Division wrote the paper under the direction 

of G. Thomas Woodward. Paul Cullinan, Arlene Holen, Donald Marron, and 

John Sabelhaus provided useful comments.

Kate Kelly edited the manuscript; Leah Mazade proofread it. Maureen Costantino 

prepared the report for publication with assistance from Allan Keaton. Lenny Skutnik 

produced the printed copies, Linda Schimmel coordinated the print distribution, and 

Simone Thomas prepared the electronic version for CBO’s Web site (www.cbo.gov).

Peter R. Orszag

Director

March 2007

v

Contents

Introduction and Summary 1

Changes Between 1997 and 2003 2

Participation Rates 3

Contributions 8

Effects of Increasing Contribution Limits 15

401(k)-Type Plans 17

Traditional IRAs 19

Roth IRAs 20

Simplified Employee Pensions 21

Savings Incentive Match Plans for Employees 23

Appendix: Average Contribution Amounts in Nominal Terms 27

Tables

1 Workers’ Participation in Tax-Favored Retirement

Plans, 1997, 2000, and 2003 3

2 Workers’ Participation in Employment-Based

Retirement Plans, 1997, 2000, and 2003 5

3 Workers’ Participation in Individual Retirement

Accounts and Self-Employed Plans, 

1997, 2000, and 2003 6

4 Workers’ Participation in Traditional or Roth

Individual Retirement Accounts, 2000 and 2003 7

5 Workers’ Average Contributions to 401(k)-Type

Plans, 1997, 2000, and 2003 9

6 Workers’ Average Contributions to Individual

Retirement Accounts, 1997, 2000, and 2003 12

7 Workers’ Average Contributions to Traditional or

Roth Individual Retirement Accounts, 

2000 and 2003 13

8 Workers’ Average Contributions to Self-Employed

Retirement Plans, 1997, 2000, and 2003 14
vi

9 Participants Contributing the Maximum to

401(k)-Type Plans, 2000 and 2003 16

10 Participants Contributing the Maximum to

Traditional Individual Retirement Accounts,

1997, 2000, and 2003 18

11 Participants Contributing the Maximum to 

Roth Individual Retirement Accounts, 

2000 and 2003 20

12 Participants Contributing the Maximum to 

Simplified Employee Pensions, 2000 and 2003 22

13 Participants Contributing the Maximum to

Savings Incentive Match Plans for Employees,

2000 and 2003 24

A-1 Workers’ Average Nominal Contributions to

401(k)-Type Plans, 1997, 2000, and 2003 28

A-2 Workers’ Average Nominal Contributions to

Individual Retirement Accounts,

1997, 2000, and 2003 29

A-3 Workers’ Average Nominal Contributions to

Traditional or Roth Individual Retirement

Accounts, 2000 and 2003 30

A-4 Workers’ Average Nominal Contributions to

Self-Employed Retirement Plans, 1997,

2000, and 2003 31

Figures

1 Distribution of 401(k) Contribution Amounts by

Participants Under Age 50 in 2003, by Income 

Group 10

2 Distribution of 401(k) Contribution Amounts by

Participants Age 50 and Above in 2003, by

Income Group 11

Tables (Continued)
Utilization of Tax Incentives for

Retirement Saving: Update to 2003

Introduction and Summary

This paper is an update of the Congressional Budget 

Office (CBO) paper Utilization of Tax Incentives for 

Retirement Saving (2003), which examined participation rates and contributions to employment-based 

retirement plans, individual retirement accounts 

(IRAs), and self-employed plans for 1997. CBO also 

published Utilization of Tax Incentives for Retirement 

Saving: An Update (2006), which compared data 

from 1997 and 2000. This paper adds comparable 

figures for 2003 to show how patterns of utilization 

have changed since 1997.

The data presented in this paper incorporate the 

effects of the Economic Growth and Tax Relief 

Reconciliation Act of 2001 (EGTRRA), which 

increased the annual dollar and percentage-ofcompensation limits on contributions to tax-favored 

retirement accounts and permitted additional 

“catch-up” contributions by taxpayers age 50 and 

over. This update examines the effect of those 

changes on the number of participants constrained 

by the limits.

CBO’s key findings are as follows:

B Overall participation in tax-favored retirement 

plans remained stable at 50 percent between 

2000 and 2003, a participation rate only very 

slightly lower than in 1997. Since 1997, participation has shifted slightly toward the following 

groups: older taxpayers, higher-income taxpayers, 

secondary earners in two-earner married couples, 

and nonearning spouses in one-earner married 

couples.

B Between 2000 and 2003, participation in 

employment-based plans increased by 

1 percentage point, to 46 percent. That increase 

occurred only for 401(k)-type plans; there was no 

change in participation in noncontributory 

plans.1

 From 1997 to 2003, participation 

decreased by 1 percentage point, with a 3-percentage-point drop in noncontributory plan 

participation more than offsetting a 2-percentage-point increase in 401(k) participation.

B Participation in IRAs decreased by 1 percentage 

point, to 7 percent, between 2000 and 2003, 

with participation split approximately evenly 

between Roth IRAs and traditional IRAs. The 

decrease was concentrated among higher-income 

taxpayers who became subject to phaseouts that 

rendered them either ineligible to contribute (in 

the case of Roths) or unable to deduct their contributions (in the case of traditional IRAs).

B The average 401(k) contribution in 2003 was 

$3,257 (in 1997 dollars), an increase of approximately 7 percent over 2000. In spite of the higher 

contribution limits allowed under EGTRRA, 

that growth rate is lower than the nearly 10 percent growth between 1997 and 2000.

1. 401(k)-type plans include 401(k)s, 403(b)s, 457s (all 

named for the sections of the Internal Revenue Code in 

which they are defined), and the federal Thrift Savings 

Plan. Noncontributory plans include all defined-benefit 

plans and defined-contribution plans that are funded 

entirely by employers. Workers participating in both a 

401(k)-type plan and a noncontributory plan are counted 

only in the former category.
2

B The average real (inflation-adjusted) contribution 

to an IRA increased between 2000 and 2003 by 

$414, to $1,926. The increase was larger for traditional IRAs ($458) than for Roth IRAs ($336). 

The increases reflect the higher contribution limits under EGTRRA, and they stand in contrast to 

the decline in average real contributions between 

1997 and 2000, when the contribution limits did 

not change.

B Increasing the limits on contributions to 401(k) 

plans reduced from 9 percent to 5 percent the 

proportion of participants constrained by the 

limits. Approximately half of that difference was 

the result of introducing $2,000 catch-up contributions for participants age 50 and over. The rest 

was attributable to increasing both the general 

dollar limit and the percentage-of-compensation 

limit on contributions.

B Increasing the limits on IRA contributions 

reduced by 16 percentage points the proportion 

of participants constrained by the limit, to 

55 percent in the case of traditional IRAs and to 

44 percent in the case of Roth IRAs. For all eligible workers (regardless of whether they chose to 

participate in IRAs), the constrained percentage 

declined from 5 to 4. For both types of IRA, 

approximately three-quarters of the difference 

was attributable to increasing the general dollar 

limit on contributions from $2,000 to $3,000. 

The rest came from introducing $500 catch-up 

contributions for participants age 50 and over.

Changes Between 1997 and 2003

Tax and associated information returns filed with the 

Internal Revenue Service (IRS) provide data on who 

was covered by employment-based retirement plans, 

who contributed to IRAs and 401(k)-type plans, and 

how much they contributed. Specifically, IRA contributions (whether deductible or not) are reported 

on Form 5498, and contributions to 401(k)-type 

plans are reported on Form W-2. Form W-2 also 

identifies workers who are covered by employmentbased plans but do not contribute toward them. 

Contributions by the self-employed are reported on 

Form 1040.2

Participation rates in employment-based plans, 

IRAs, and self-employed plans, and average contributions to each, were tabulated from samples of tax 

returns for 1997, 2000, and 2003 that were prepared 

by the IRS and enhanced by attaching data from 

Forms W-2 and 5498.3 Those information returns 

do not undergo the same degree of consistency 

checking by the IRS that the tax returns themselves 

do. Therefore, CBO developed separate procedures 

for the two files to impose consistency with the 

amounts reported on Forms 1040. (The procedures 

are described in Appendix A of Utilization of Tax 

Incentives for Retirement Saving.) To facilitate comparisons among years, all dollar amounts are presented in 1997 dollars.

2. In previous editions of Utilization of Tax Incentives for 

Retirement Saving, contributions by the self-employed were 

referred to as “Keogh contributions.” That term has been 

replaced on Form 1040 by “Self-employed SEP [simplified 

employee pension], SIMPLE [Savings Incentive Match 

Plans for Employees], and qualified plans,” shortened here 

to “self-employed plans.”

3. Because the tabulations are from a sample, some sampling 

error is inevitable. The IRS publishes coefficients of variation (CV) for most of the fields that can be extracted from 

Form 1040. For IRA and self-employed contributions in 

2003, the CVs for those fields (for both the number of 

returns and the amounts) were approximately 2 percent 

(see Internal Revenue Service, Statistics of Income—2003: 

Individual Income Tax Returns [September 2005], pp. 70–

71). Thus, there is a 1-in-20 chance that sampling error 

would cause the tabulated value to be more than 4 percent 

higher or 4 percent lower than the true value. For a tabulated dollar amount of $1,000, that would translate into a 

range of $960 to $1,040. Corresponding CVs in 1997 were 

slightly higher but still less than 3 percent (see Internal 

Revenue Service, Statistics of Income—1997: Individual 

Income Tax Returns [December 1999], pp. 58, 59). CVs for 

contributions to 401(k)-type plans are not published but 

would probably be lower than those for IRAs and selfemployed plans. Those for contributions to SEPs and 

SIMPLEs would probably be higher.
3

Table 1.

Workers’ Participation in Tax-Favored Retirement Plans, 

1997, 2000, and 2003

Source: Congressional Budget Office tabulations of a sample of 1997, 2000, and 2003 individual income tax returns and tax 

information returns.

Note: Participation consists of contributing to an individual retirement account, self-employed plan, or 401(k)-type plan or 

being enrolled in a noncontributory plan during the given year. The income classifier is adjusted gross income plus 

excluded contributions to retirement plans less taxable distributions from individual retirement accounts.

Participation Rates

Participation data were available for employmentbased plans, IRAs, and self-employed plans. Information returns also identified two subgroups of 

employment-based-plan participants: One group 

contributed to 401(k)-type plans; the other participated in noncontributory plans only. Rates are 

expressed as a percentage of all workers filing tax 

returns.

Overall Participation. Overall participation in taxfavored retirement plans has been roughly constant 

since 1997. It declined by 1 percentage point, to 

50 percent between 1997 and 2000, then remained 

unchanged through 2003 (see Table 1). The decline 

between 1997 and 2003 differed among age groups, 

income groups, and groupings by marital status and 

earner role.

Category

Under 30 40,765 35 40,068 33 38,895 32

30 to 44 50,205 58 49,411 56 48,806 56

45 to 59 31,822 64 35,316 63 39,779 63

60 and Over 10,605 42 11,388 40 13,330 44 ________ ________ ________

All Cohorts 133,397 51 136,183 50 140,809 50

Under $20,000 45,686 21 44,660 20 47,515 20

$20,000 to $40,000 32,066 55 31,932 51 33,410 52

$40,000 to $80,000 36,720 70 37,013 67 37,428 68

$80,000 to $120,000 11,474 79 13,036 79 13,281 80

$120,000 to $160,000 3,491 81 4,352 83 4,562 82

$160,000 and Over 3,960 77 5,191 79 4,612 79 ________ ________ ________

All Income Groups 133,397 51 136,183 50 140,808 50

Unmarried Earners 64,388 41 67,635 39 69,798 40

Married Earners

Sole 18,955 53 19,756 46 21,186 52

Primary 25,028 72 24,396 75 24,912 72

Secondary 25,028 54 24,396 59 24,912 57 ________ ________ ________

All Earners 133,397 51 136,183 50 140,808 50

Nonearning Spouse 18,955 6 19,756 7 21,186 9

Any Plan

1997 2000 2003

Number of Number of Number of

Percentage

Actively

Percentage

Actively

Participating in

Any Plan

Percentage

Actively

Participating in

Any Plan

By Age Cohort

By Income Group (1997 dollars)

By Marital Status/Earner Role

Workers

(Thousands)

Workers

(Thousands)

Workers

(Thousands)

Participating in
4

The decline in participation, although small for all 

groups, was largest among taxpayers under age 30. 

Their participation—at 35 percent, the lowest of 

any age group in 1997—fell by 3 percentage points, 

to 32 percent, in 2003. In successively older groups, 

up to age 60, participation rates were higher, and the 

decline in participation between 1997 and 2003 

was less. Specifically, in the 30–44 group, the decline 

was 2 percentage points, from 58 percent to 56 percent; in the 45–59 group, the decline was 1 percentage point, from 64 percent to 63 percent. At age 60 

and over, the participation rate in 2003 was 44 percent, but that was a 2-percentage-point increase over 

1997.

Workers with income over $80,000 participated at a 

higher rate in 2003 than they did in 1997. The 

highest participation rate, 82 percent, was for those 

earning between $120,000 and $160,000; that was 

up from 81 percent in 1997.4 Participation among 

earners with the highest income was slightly lower, at 

79 percent, up from 77 percent in 1997. In contrast, 

participation by those with income between 

$20,000 and $40,000 dropped by 3 percentage 

points, to 52 percent. Participation in the lowest 

(and largest) income group dropped 1 percentage 

point, to 20 percent. Among workers with income 

between $40,000 and $80,000, participation 

dropped by 2 percentage points between 1997 and 

2003, but that level was still well above the average.

Participation increased among two marital status/

earner roles dominated by women: secondary earners (up 3 percentage points between 1997 and 2003, 

to 57 percent) and nonearning spouses (up 3 percentage points, to 9 percent). Unmarried earners 

and sole earners participated at rates 1 percentage 

point lower in 2003 than in 1997. The group with 

the highest participation rate in 1997—primary 

earners—participated at the same rate, 72 percent, 

in 2003.

Employment-Based Plans. After declining by 

2 percentage points between 1997 and 2000, participation in employment-based plans increased by 

1 percentage point, to 46 percent, between 2000 

and 2003. The patterns by age group, income group, 

and marital status/earner role mirror those described 

above for overall participation.

When disaggregated by type of plan, however, the 

participation patterns differ somewhat. From 1997 

to 2003, participation in 401(k)-type plans increased 

by 2 percentage points, to 29 percent; participation 

solely in noncontributory plans declined by 

3 percentage points, to 17 percent (see Table 2). 

Those differences largely reflect a continuation of 

the long-term trend among employers of shifting 

from traditional pensions to 401(k)-type plans.5

Despite that trend, however, the tax data show the 

4. Results by income group are not comparable to those presented in previous editions of Utilization of Tax Incentives 

for Retirement Saving, because the income classifier is different. The change was motivated by the introduction of Roth 

IRAs. Deductible contributions to traditional IRAs reduce 

the value of adjusted gross income (AGI), the income classifier used in previous editions. An identical contribution 

to a Roth IRA, in contrast, does not change the value of 

AGI. Thus, people identical in every way except the type 

of IRA to which they contribute could be placed in different income groups. To avoid that inconsistent treatment, 

CBO adopted a different income classifier for this report. 

That classifier starts with AGI but adds back all contributions to IRAs, self-employed plans, and 401(k)-type plans 

that reduced AGI. To avoid the double counting of 

income, taxable distributions from IRAs were subtracted 

from the classifier. Taxable pensions and annuities were not 

subtracted because they consist primarily of distributions 

from defined-benefit plans, the contributions to which 

were not added into the classifier.

5. The trend was illustrated in Figure 1 of Utilization of Tax 

Incentives for Retirement Saving (p. 4). The data series on 

which that figure was based was discontinued by the 

Department of Labor after 1999.
5

Table 2.

Workers’ Participation in Employment-Based Retirement Plans, 

1997, 2000, and 2003

(Percentage of all workers)

Source: Congressional Budget Office tabulations of a sample of 1997, 2000, and 2003 individual income tax returns and 

tax information returns.

Notes: Participation consists of making a contribution to a 401(k)-type plan or being enrolled in a noncontributory plan 

during the given year. Workers participating in both types of plan are counted only in the 401(k)-type, so summing 

the percentages yields participation in all employment-based plans. The income classifier is adjusted gross income 

plus excluded contributions to retirement plans less taxable distributions from individual retirement accounts.

n.a. = not applicable.

decline in participation in noncontributory plans 

occurring entirely between 1997 and 2000.

The increase in participation in 401(k)-type plans 

was limited to those age 30 and above; the youngest 

group exhibited a slight decrease between 2000 and 

2003. The oldest group showed an increase of 4 percentage points increase between 2000 and 2003. No 

income group showed decreased participation. 

Between 1997 and 2003, the participation rate 

remained flat or increased by 1 percentage point for 

those with income below $40,000; for those with 

income between $40,000 and $120,000, the participation rate increased by 2 percentage points, and for 

those with income in excess of $120,000, participation increased by 4–6 percentage points. No strong 

Category

Under 30 15 15 14 18 15 16

30 to 44 32 34 34 22 18 18

45 to 59 36 37 38 22 19 19

60 and Over 18 18 22 16 14 15

All Cohorts 27 28 29 20 17 17

Under $20,000 5 6 6 14 12 12

$20,000 to $40,000 26 26 26 25 21 22

$40,000 to $80,000 40 41 42 25 20 21

$80,000 to $120,000 55 54 57 18 17 17

$120,000 to $160,000 56 59 60 14 14 14

$160,000 and Over 48 52 54 13 13 12

All Income Groups 27 28 29 20 17 17

Unmarried Earners 19 20 21 19 16 16

Married Earners

Sole 27 26 30 20 14 17

Primary 44 48 47 23 20 20

Secondary 29 32 31 20 19 19

All Earners 27 28 29 20 17 17

Nonearning Spouse n.a. n.a. n.a. n.a. n.a. n.a.

By Marital Status/Earner Role

1997 2000 2003 1997 2000 2003

401(k)-Type Plans Noncontributory Plans Only 

By Age Cohort

By Income Group (1997 dollars)
6

Table 3.

Workers’ Participation in Individual Retirement Accounts and 

Self-Employed Plans, 1997, 2000, and 2003 

(Percentage of all workers)

Source: Congressional Budget Office tabulations of a sample of 1997, 2000, and 2003 individual income tax returns and tax 

information returns.

Notes: Participation consists of making a contribution to an IRA or self-employed plan during the given year. The income 

classifier is adjusted gross income plus excluded contributions to retirement plans less taxable distributions from IRAs.

IRA = individual retirement account; n.a. = not applicable.

patterns emerged among different marital status/

earner roles, although it is notable that for married 

earners, changes between 2000 and 2003 were all in 

the opposite direction from the changes between 

1997 and 2000.

The decline in participation in noncontributory 

plans was similar for all age groups between 1997 

and 2000. Between 2000 and 2003, however, that 

decline was reversed slightly in the youngest and oldest groups. The decline was sharpest among those 

with income below $80,000, and no income class 

experienced an increase. By marital status/earner 

role, declines in participation between 1997 and 

2003 mirrored the average of 3 percentage points, 

except for secondary earners, whose participation 

declined by only 1 percentage point between 1997 

and 2003.

IRAs and Self-Employed Plans. Participation in IRAs 

increased by 2 percentage points, to 8 percent, 

Category

Under 30 3 4 4 <1 <1 <1

30 to 44 6 8 7 1 1 1

45 to 59 9 12 10 2 2 2

60 and Over 10 10 9 1 2 2

All Cohorts 6 8 7 1 1 1

Under $20,000 2 3 2 <1 <1 <1

$20,000 to $40,000 6 7 6 <1 <1 <1

$40,000 to $80,000 7 10 10 1 1 1

$80,000 to $120,000 9 16 14 2 2 2

$120,000 to $160,000 15 21 15 4 4 4

$160,000 and Over 17 14 12 9 9 10

All Income Groups 6 8 7 1 1 1

Unmarried Earners 4 6 5 <1 <1 <1

Married Earners

Sole 8 9 8 2 1 1

Primary 8 11 10 2 2 2

Secondary 7 11 10 1 1 1

All Earners 6 8 7 1 1 1

Nonearning Spouse 6 7 6 n.a. n.a. n.a.

By Age Cohort

By Income Group (1997 dollars)

By Marital Status/Earner Role

IRAs Self-Employed Plans

1997 2000 2003 1997 2000 2003
7

Table 4.

Workers’ Participation in Traditional or Roth Individual Retirement 

Accounts, 2000 and 2003

Source: Congressional Budget Office tabulations of a sample of 2000 and 2003 individual income tax returns and tax 

information returns.

Notes: Participation consists of making a contribution to a traditional IRA or a Roth IRA during the given year. The income 

classifier is adjusted gross income plus excluded contributions to retirement plans less taxable distributions from IRAs.

IRA = individual retirement account.

between 1997 and 2000, but declined to 7 percent 

in 2003 (see Table 3). The original increase largely 

reflected the 1998 introduction of Roth IRAs; the 

subsequent decline largely reflects the effect of 

unindexed thresholds of eligibility for those Roth 

IRAs. Because the eligibility threshold is defined by 

income, differences in the decline occur primarily 

among the various income groups; changes among 

age groups and marital status/earner roles were fairly 

uniform.

For taxpayers with income of $80,000 or less, IRA 

participation rates remained unchanged or declined 

by 1 percentage point between 2000 and 2003. In 

each of the highest three income groups, however, 

participation declined by at least 2 percentage 

points. The steepest decline—6 percentage points, 

from 21 percent to 15 percent—occurred in the 

$120,000–$160,000 group. Roth IRAs account for 

nearly 5 percentage points of that drop; traditional 

IRAs account for the rest (see Table 4). The nominal 

Category

Under 30 40,068 1 3 38,895 1 3

30 to 44 49,411 4 4 48,806 3 4

45 to 59 35,316 7 5 39,779 6 5

60 and Over 11,388 7 2 13,330 6 3 ________ ________

All Cohorts 136,183 4 4 140,809 4 4

Under $20,000 44,660 1 2 47,515 1 1

$20,000 to $40,000 31,932 4 3 33,410 4 3

$40,000 to $80,000 37,013 5 5 37,428 5 5

$80,000 to $120,000 13,036 6 10 13,281 5 9

$120,000 to $160,000 4,352 9 13 4,562 7 8

$160,000 and Over 5,191 14 0 4,612 12 0 ________ ________

All Income Groups 136,183 4 4 140,808 4 4

Unmarried Earners 67,635 3 3 69,798 2 3

Married Earners

Sole 19,756 5 3 21,186 5 3

Primary 24,396 6 6 24,912 5 5

Secondary 24,396 6 5 24,912 5 5 ________ ________

All Earners 136,183 4 4 140,808 4 4

Nonearning Spouse 19,756 5 3 21,186 4 2

By Income Group (1997 dollars)

Number of

Workers

(Thousands)

Percentage

Participating in

Traditional IRAs

Percentage

2000

Percentage

Participating in

Roth IRAs

2003

By Marital Status/Earner Role

Number of

Workers

(Thousands)

Percentage

Participating in

Traditional IRAs

Participating in

Roth IRAs

By Age Cohort
8

threshold of Roth eligibility for married couples in 

2000 and 2003 was $160,000, but because the 

results are presented in 1997 dollars, that threshold 

actually falls into the $120,000–$160,000 group in 

both years; it was the equivalent of $149,296 in 

2000 and $140,245 in 2003. As the threshold drops 

further into the lower income class, more and more 

taxpayers in that class become ineligible; hence the 

steep decline in participation. 

The same $160,000 threshold exists for deducting 

contributions to traditional IRAs when a married 

participant’s spouse is covered by an employmentbased plan; thus, a similar devaluation phenomenon 

results in lower participation rates.6

 A 2-percentagepoint decline in traditional IRA participation rates 

also occurred in the $160,000-and-above group, perhaps reflecting that group’s further removal from the 

realm of deductibility.

Participation rates in self-employed plans are generally too low to reveal patterns in participation by age 

group, marital status, or earner role. However, no 

evidence emerged to indicate any change in the patterns between 2000 and 2003 (see Table 3).

Contributions

Data on employee contributions were available for 

401(k)-type plans, IRAs, and self-employed plans. 

Results are presented in terms of average contributions in 1997 dollars. Employer contributions to 

retirement plans are not considered here because 

they are reported to the IRS only in the aggregate, 

and the amounts cannot be linked to individual 

taxpayers.

Changes in average contributions should not be 

interpreted as reflecting a change in overall saving. 

The differences also might reflect the shifting of 

assets between taxable and nontaxable accounts. 

CBO did not attempt to identify what proportion of 

higher average contributions should be attributed to 

new saving and what represents shifting between 

types of accounts.

401(k)-Type Plans. The nominal statutory dollar 

limit on 401(k) contributions by employees 

increased with inflation from $9,500 to $10,500 

between 1997 and 2000 and by statute to $12,000 

in 2003. A 25-percent-of-compensation limit on 

401(k) contributions that was in place in 1997 and 

2000 was increased to 100 percent for 2003, and in 

2003, taxpayers age 50 and over were allowed to 

make catch-up contributions of $2,000 above the 

limit for other taxpayers. Despite the higher limits in 

2003, the growth in average real contributions was 

smaller between 2000 and 2003 (7.2 percent) than it 

had been between 1997 and 2000 (9.6 percent; see 

Table 5). The patterns among income groups, age 

groups, and marital status/earner role groups 

changed substantially from 2000 to 2003.

Average contributions increased with income in each 

year and represented roughly similar shares of 

income, ranging from about 5 percent of adjusted 

gross income (AGI) in the lower-income groups to 

around 4 percent in the higher-income groups. The 

pattern of average contributions, however, may 

obscure the size distribution of contributions within 

groups. Figures 1 and 2 show how the amounts of 

contributions in 2003 were distributed within each 

income group for participants under age 50 

(Figure 1) and age 50 and above (Figure 2). The patterns within the bars show the contribution amounts 

at or below the 10th, 25th, 50th, 75th, and 90th 

percentiles. The amount at each percentile increased 

with income, as expected, but the figures also illustrate that the distributions were skewed toward 

smaller contributions. The range between the 50th 

and 75th percentiles was always wider than that 

between the 25th and 50th percentiles. Except in the 

6. Although the eligibility threshold for traditional IRAs does 

not preclude contributions as does the eligibility threshold 

for Roth IRAs, the reduced tax incentive associated with 

nondeductibility deters participation.
9

Table 5.

Workers’ Average Contributions to 401(k)-Type Plans, 

1997, 2000, and 2003

Source: Congressional Budget Office tabulations of a sample of 1997, 2000, and 2003 individual income tax returns and tax 

information returns. 

Notes: The income classifier is adjusted gross income plus excluded contributions to retirement plans less taxable distributions

from individual retirement accounts.

n.a. = not applicable.

highest-income group, the range between the 75th 

and 90th percentiles was always wider than that 

between the 10th and 25th percentiles. (More than 

25 percent of participants in the highest group were 

constrained by the contribution limit, so the 75th 

and 90th percentiles were the same.)

Between 1997 and 2000, growth rates of average real 

contributions were highest for the lowest-income 

group—more than 16 percent—and they were negative for the highest-income group. For every group 

in between, the growth rate was less than 10 percent. 

The decline in the rate of growth in average contributions as income increased may have reflected the 

number of participants in each income class who 

contributed the maximum in 1997 and could not 

contribute more in real terms in 2000, thereby 

dampening the growth rate. 

Category

Under 30 6,128 1,592 6,102 1,873 5,611 1,710

30 to 44 16,288 2,681 16,868 2,993 16,635 3,084

45 to 59 11,360 3,466 13,164 3,590 15,094 3,917

60 and Over 1,889 3,213 2,092 3,338 2,916 3,801 _______ _______ _______

All Cohorts 35,666 2,772 38,226 3,039 40,257 3,257

Under $20,000 2,448 546 2,611 635 2,976 636

$20,000 to $40,000 8,331 1,324 8,248 1,397 8,806 1,388

$40,000 to $80,000 14,718 2,482 15,112 2,633 15,753 2,772

$80,000 to $120,000 6,310 4,131 7,019 4,245 7,511 4,634

$120,000 to $160,000 1,958 5,360 2,561 5,706 2,741 6,553

$160,000 and Over 1,902 7,054 2,675 7,019 2,470 8,330 _______ _______ _______

All Income Groups 35,666 2,772 38,226 3,039 40,257 3,257

Unmarried Earners 12,404 2,190 13,591 2,448 14,463 2,534

Married Earners

Sole 5,147 3,580 5,055 3,881 6,318 4,196

Primary 10,973 3,398 11,801 3,712 11,798 3,988

Secondary 7,141 2,239 7,779 2,501 7,678 2,722 _______ _______ _______

All Earners 35,666 2,772 38,226 3,039 40,257 3,257

Nonearning Spouse n.a. n.a. n.a. n.a. n.a. n.a.

Participants Contribution

(Thousands) (1997 dollars)

By Income Group (1997 dollars)

By Marital Status/Earner Role

Number of Average

Participants Contribution

(Thousands) (1997 dollars)

Number of Average

1997 2000 2003

By Age Cohort

Number of

Participants

(Thousands)

Average

Contribution

(1997 dollars)
10

Figure 1.

Distribution of 401(k) Contribution Amounts by

Participants Under Age 50 in 2003, by Income Group

(Thousands of dollars)

Source: Congressional Budget Office.

The increase in the contribution limits under 

EGTRRA, however, produced a different pattern 

among income groups in 2003. Because the percentage of contributors constrained by the pre-EGTRRA 

dollar limit increases with income, the higher limit 

affected more contributors in higher-income groups 

than it did in lower-income groups. Rates of growth 

in average real contributions between 2000 and 

2003 ranged from 0.6 percent in the $20,000– 

$40,000 group to 18.6 percent in the $160,000-

and-above group. 

Between 1997 and 2000, age groups with the lowest 

average contributions exhibited the most growth in 

contributions. In general, that meant that contributions from younger groups grew the most, although 

contributions by workers age 60 and over grew 

slightly more than did those from workers in the 45–

59 group. Between 2000 and 2003, however, the 

older groups exhibited more growth in contributions, and that disproportionate growth appears 

to be linked to the catch-up contributions allowed 

to participants age 50 and over. In contrast, average 

real contributions actually declined in the under-30 

group, despite the slightly higher dollar limit. 

Married people made higher average contributions 

than did unmarried people, and between 2000 and 

2003, their average contributions increased by more 

than did those of unmarried people. The difference 

in growth rates among marital status/earner roles 

was not, however, as great as it was among age or 

income groups.

IRAs. The $2,000 limit on contributions to IRAs did 

not change between 1997 and 2000; over that time, 

average real IRA contributions declined.7

 Adjusted 

for inflation, a $2,000 nominal contribution

Less Than

$20,000

$20,000 to

$40,000

$40,000 to

$80,000

$80,000 to

$120,000

$120,000 to

$160,000

Over $160,000

0

2

4

6

8

10

12

14

Less Than 10th Percentile

Less Than 25th Percentile

Less Than 50th Percentile

Less Than 75th Percentile

Less Than 90th Percentile

7. In addition to the $2,000 limit, IRA contributions in 1997 

and 2000 were limited to the amount of compensation 

(except for nonearning spouses, in which case the combined contributions of the spouses were limited to the 

compensation of the earning spouse). That limit was rarely 

binding.
11

Figure 2.

Distribution of 401(k) Contribution Amounts by

Participants Age 50 and Above in 2003, by Income Group

(Thousands of dollars)

Source: Congressional Budget Office.

in 2000 was the equivalent of a 1997 contribution of 

$1,866. Because almost two-thirds of participants 

were contributing the maximum in 1997 and could 

not increase their contributions in 2000, the real 

value of their contributions fell.

EGTRRA raised the contribution limit in 2003 to 

$3,000 for taxpayers under age 50 and to $3,500 for 

taxpayers age 50 and over. That is a much larger 

increase relative to the pre-EGTRRA amount than 

for 401(k) plans. Therefore, more room was created 

for higher contributions. Furthermore, because a 

higher percentage of contributors were constrained 

by the pre-EGTRRA limits, more of them were able 

to increase their contributions. Overall, average real 

contributions to IRAs increased by 27.3 percent 

between 2000 and 2003, to an average of $1,926 

(see Table 6). 

Average contributions to IRAs increased with 

income in all years, and between 2000 and 2003, the 

growth in contributions also increased with income. 

As for 401(k) plans, each successively higher income 

group had more contributors who, previously constrained by pre-EGTRRA limits, now could contribute more. 

Contributions to traditional IRAs grew by more 

during the 2000–2003 period (31.8 percent) than 

did contributions to Roth IRAs (22.7 percent; see 

Table 7). There was room for growth in contributions to traditional IRAs in the highest income 

group, which had the largest percentage of contributors constrained by the pre-EGTRRA limit. 

Because those taxpayers were prohibited from 

contributing to Roth IRAs at all, they are not considered in the calculation of average real growth in 

Roth contributions. Even within many income 

groups, however, the growth in contributions to traditional IRAs was greater between 2000 and 2003 

than was the growth in contributions to Roth IRAs. 

The pattern of contribution growth increasing with 

income does not quite hold for traditional IRAs and 

Less Than

$20,000

$20,000 to

$40,000

$40,000 to

$80,000

$80,000 to

$120,000

$120,000 to

$160,000

Over $160,000

0

2

4

6

8

10

12

14

16

Less Than 10th Percentile

Less Than 25th Percentile

Less Than 50th Percentile

Less Than 75th Percentile

Less Than 90th Percentile
12

Table 6.

Workers’ Average Contributions to Individual Retirement Accounts,

1997, 2000, and 2003

Source: Congressional Budget Office tabulations of a sample of 1997, 2000, and 2003 individual income tax returns and tax 

information returns.

Note: The income classifier is adjusted gross income plus excluded contributions to retirement plans less taxable distributions 

from individual retirement accounts.

Roth IRAs separately; in each case, growth in 

contributions was lower in the highest eligible 

income group than in the one below it. Growth in 

contributions to traditional IRAs ranged from 

15.2 percent in the lowest income group to 

53.4 percent in the $120,000–$160,000 group, 

before dropping to 46.8 percent in the highest 

income group. Growth in contributions to Roth 

IRAs ranged from 3.0 percent in the lowest income 

group to 31.0 percent in the $80,000–$120,000 

group, dropping to 30.2 percent in the $120,000–

$160,000 group. 

Average contributions also increased with age in all 

years. As with 401(k) plans, the catch-up contributions by participants age 50 and older resulted in the 

largest increases occurring in the top two age groups. 

The correlation between age and the growth in average real contributions was stronger for Roth IRAs. 

The growth in average Roth contributions ranged

Category

Under 30 1,020 1,407 1,772 1,378 1,452 1,493

30 to 44 2,815 1,530 3,800 1,474 3,213 1,741

45 to 59 2,971 1,675 4,189 1,564 4,166 2,122

60 and Over 1,012 1,713 1,099 1,659 1,214 2,258 ______ ______ ______

All Cohorts 7,818 1,593 10,860 1,512 10,045 1,926

Under $20,000 925 1,428 1,197 1,355 1,156 1,481

$20,000 to $40,000 2,062 1,513 2,236 1,397 2,160 1,720

$40,000 to $80,000 2,631 1,520 3,736 1,486 3,688 1,912

$80,000 to $120,000 1,012 1,741 2,055 1,627 1,810 2,142

$120,000 to $160,000 517 1,863 911 1,652 690 2,310

$160,000 and Over 670 1,915 727 1,753 540 2,578 ______ ______ ______

All Income Groups 7,818 1,593 10,860 1,512 10,045 1,926

Unmarried Earners 2,833 1,549 3,820 1,451 3,508 1,777

Married Earners

Sole 1,444 1,626 1,684 1,571 1,663 2,163

Primary 1,878 1,613 2,673 1,546 2,443 1,963

Secondary 1,663 1,615 2,683 1,527 2,431 1,940 ______ ______ ______

All Earners 7,818 1,593 10,860 1,512 10,045 1,926

Nonearning Spouse 1,142 1,583 1,466 1,559 1,319 2,182

By Age Cohort

By Income Group (1997 dollars)

By Marital Status/Earner Role

1997 2000 2003

Number of Average Number of Average Number of Average

Participants

(Thousands)

Contribution

(1997 dollars)

Participants Contribution

(Thousands) (1997 dollars)

Participants Contribution

(Thousands) (1997 dollars)
13

Table 7.

Workers’ Average Contributions to Traditional or

Roth Individual Retirement Accounts, 2000 and 2003

(1997 dollars)

Source: Congressional Budget Office tabulations of a sample of 2000 and 2003 individual income tax returns and tax 

information returns.

Notes: The income classifier is adjusted gross income plus excluded contributions to retirement plans less taxable distributions

from IRAs.

IRA = individual retirement account; n.a. = not applicable. 

from 6.3 percent in the youngest group to 38.9 percent in the oldest group. For traditional IRAs, the 

range was between 18.2 percent in the youngest 

group and 36.7 percent in the 45–59 group; in the 

oldest group, the growth was 32.6 percent.

Average real contributions varied little by marital 

status/earner role in 1997 and 2000. In 2000, there 

was a $120 difference between the lowest average 

contribution (by unmarried participants) and the 

highest average contribution (by sole earners). 

The EGTRRA changes, however, seem to have 

resulted in some differentiation. By 2003, that difference had widened to $386, and the difference 

between the average for unmarried participants and 

that for nonearning spouses was $405.

Category

Under 30 1,146 1,387 1,355 1,475

30 to 44 1,370 1,460 1,662 1,701

45 to 59 1,481 1,565 2,024 2,069

60 and Over 1,636 1,549 2,169 2,151

All Cohorts 1,440 1,479 1,898 1,815

Under $20,000 1,281 1,326 1,476 1,366

$20,000 to $40,000 1,340 1,325 1,680 1,613

$40,000 to $80,000 1,372 1,487 1,830 1,832

$80,000 to $120,000 1,529 1,615 2,036 2,115

$120,000 to $160,000 1,568 1,635 2,406 2,128

$160,000 and Over 1,770 n.a. 2,599 n.a.

All Income Groups 1,440 1,479 1,898 1,815

Unmarried Earners 1,364 1,416 1,727 1,695

Married Earners

Sole 1,512 1,520 2,103 2,040

Primary 1,480 1,524 1,963 1,825

Secondary 1,445 1,517 1,905 1,862

All Earners 1,440 1,479 1,898 1,815

Nonearning Spouse 1,486 1,552 2,176 2,022

By Marital Status/Earner Role

2000 2003

Traditional

IRAs

Roth

IRAs

Traditional Roth

IRAs IRAs

By Age Cohort

By Income Group (1997 dollars)
14

Table 8.

Workers’ Average Contributions to Self-Employed Retirement Plans, 

1997, 2000, and 2003

Source: Congressional Budget Office tabulations of a sample of 1997, 2000, and 2003 individual income tax returns and tax 

information returns.

Notes: The income classifier is adjusted gross income plus excluded contributions to retirement plans less taxable distributions

from individual retirement accounts.

n.a. = not applicable.

Self-Employed Plans. Contributions to three kinds 

of plans are reported on the line for self-employed 

plans: simplified employee pensions (SEPs), Savings 

Incentive Match Plans for Employees (SIMPLEs), 

and other qualified plans.8 Each has statutory limits 

on contributions ($6,500 for SIMPLEs; $30,000 for 

SEPs and other qualified plans) that did not increase 

between 1997 and 2000. Average contributions, 

however, increased as a result of inflation and real 

growth in self-employment income. The overall 

average real contribution increased by nearly 4 percent, to $8,405 (see Table 8).

Category

Under 30 24 4,675 28 5,137 29 6,557

30 to 44 469 8,050 476 7,909 376 10,807

45 to 59 546 8,211 657 9,093 652 12,829

60 and Over 121 8,612 172 7,675 217 12,276 ______ ______ ______

All Cohorts 1,159 8,115 1,332 8,405 1,274 11,995

Under $20,000 32 2,245 39 1,920 35 2,716

$20,000 to $40,000 93 2,665 98 2,761 97 3,525

$40,000 to $80,000 269 4,098 319 4,027 260 5,534

$80,000 to $120,000 242 6,360 268 5,432 268 7,836

$120,000 to $160,000 145 9,433 156 8,500 170 11,640

$160,000 and Over 340 14,578 453 14,984 443 21,015 ______ ______ ______

All Income Groups 1,159 8,115 1,332 8,405 1,274 11,995

Unmarried Earners 223 7,290 273 7,465 253 12,714

Married Earners

Sole 290 11,311 296 12,189 284 16,304

Primary 377 9,812 443 10,054 411 14,256

Secondary 268 2,960 320 3,409 327 4,852 ______ ______ ______

All Earners 1,159 8,115 1,332 8,405 1,274 11,995

Nonearning Spouse n.a. n.a. n.a. n.a. n.a. n.a.

1997 2000 2003

Number of Average Number of Average Number of Average

(1997 dollars)

Participants Contribution Participants Contribution

By Age Cohort

By Income Group (1997 dollars)

By Marital Status/Earner Role

Participants Contribution

(Thousands) (1997 dollars) (Thousands) (1997 dollars) (Thousands)

8. About half of SEPs and most SIMPLEs are counted with 

employment-based plans, not self-employed plans.
15

In 2003, EGTRRA increased the limit on contributions to SIMPLEs to $8,000 ($9,000 for taxpayers 

age 50 and over), and it raised the limit on contributions to SEPs and other qualified plans to $40,000. 

The SIMPLE limit of 25 percent of earnings was 

increased to 100 percent (as it was for other qualified 

plans), and the 15 percent limit for SEPs was 

increased to 25 percent. Because fewer than 10 percent of self-employed participants had been constrained by the pre-EGTRRA contribution limits, 

those changes would not be expected to lead to large 

increases in contributions. However, at 42.7 percent, 

the increase in average contributions to selfemployed plans between 2000 and 2003 was much 

larger than the increase between 1997 and 2000.

As was the case for 401(k) plans and IRAs, average 

contributions to self-employed plans increased with 

income. At income above $20,000, average contributions in 2003 hovered around 10 percent of AGI. 

Unlike 401(k) plans and IRAs, however, the growth 

in average contributions to self-employed plans was 

higher at the low end of the income scale (41.5 percent) than at the high end (40.2 percent), perhaps 

because taxpayers constrained by the pre-EGTRRA 

percentage-of-earnings limit were concentrated at 

the low end of the income scale. The increase in that 

limit created room for participants to increase their 

contributions by as much as a factor of four. For 

those in the highest-income group, the dollar limit 

would have become binding long before the percentage-of-earnings limit would apply, in most cases, and 

its increase created room for only a 33 percent 

increase in contributions (still less than the 40.2 percent increase actually observed).

In 2003, average contributions by taxpayers under 

age 30 were barely half of those by taxpayers in the 

45–59 age group, which had the highest contributions. Average contributions in the other age groups 

were much closer to those in the 45–59 group than 

to those in the under-30 group. Growth in average 

contributions between 2000 and 2003 increased 

with age, ranging from 27.6 percent in the youngest 

group to 59.9 percent in the oldest group.

Among different marital status/earner roles, average 

contributions were highest for sole earners and 

lowest for secondary earners. Growth in contributions was highest among unmarried participants 

(70.3 percent) and lowest among sole earners 

(33.8 percent).

Effects of Increasing Contribution 

Limits 

Several features of EGTRRA affected incentives for 

retirement saving. Those that can most readily be 

illustrated involve increased contribution limits; 

most other features cannot be illustrated with this 

particular data set. The effects of increasing contribution limits are illustrated by hypothetically imposing different types of contribution limits one by one 

to see how each affects the constrained percentage of 

participants.9

 The exercise is performed for each 

type of account observable in the data: 401(k)-type 

plans, traditional and Roth IRAs, SEPs, and 

SIMPLEs.

9. Note that the results for any specific type of contribution 

limit are dependent on the order in which they are introduced. The order selected generally introduces the more 

widely known limits first.
16

Table 9.

Participants Contributing the Maximum to 401(k)-Type Plans,

2000 and 2003

(Percentage of participants)

Source: Congressional Budget Office tabulations of a sample of 2000 and 2003 individual income tax returns and tax 

information returns.

Notes: The income classifier is adjusted gross income plus excluded contributions to retirement plans less taxable distributions

from individual retirement accounts. Figures are not comparable to those in Table 4 of CBO’s Utilization of Tax 

Incentives for Retirement Saving: An Update (2006) because exceptions to the cap that applied to 403(b) and 457 plans 

are ignored.

EGTRRA = Economic Growth and Tax Relief Reconciliation Act of 2001; n.a. = not applicable.

Category

Under 30 2 2 2 2 1

30 to 44 6 8 6 6 6

45 to 59 8 12 11 8 6

60 and Over 9 14 13 9 5

All Cohorts 6 9 8 6 5

Under $20,000 1 1 1 1 <1

$20,000 to $40,000 1 1 1 1 <1

$40,000 to $80,000 2 4 3 3 1

$80,000 to $120,000 7 12 10 7 6

$120,000 to $160,000 18 26 23 18 16

$160,000 and Over 37 52 48 39 37

All Income Groups 6 9 8 6 5

Unmarried Earners 4 6 5 4 3

Married Earners

Sole 12 15 13 9 8

Primary 8 11 10 7 7

Secondary 5 8 7 6 3

All Earners 6 9 8 6 5

Nonearning Spouse n.a. n.a. n.a. n.a. n.a.

By Marital Status/Earner Role

By Age Cohort

By Income Group (1997 dollars)

2000 Percentage Cap

2003

Pre-EGTRRA Law EGTRRA Dollar Cap

Plus EGTRRA

Catch-Up Cap

Plus EGTRRA
17

401(k)-Type Plans

In 2000, 6 percent of participants in 401(k)-type 

plans made contributions at the $10,500 limit or at 

the limit of 25 percent of compensation (see 

Table 9).10 Absent EGTRRA, the dollar limit would 

have increased to $11,500 in 2003, and, assuming 

the contributions actually observed in that year, 

9 percent of participants would have been constrained by that limit. Imposing the general $12,000 

cap allowed under EGTRRA, however, constrains 

only 8 percent of participants. Increasing that limit 

for participants age 50 and over by $2,000 reduces 

the figure to 6 percent. Finally, increasing the percentage-of-compensation limit from 25 percent to 

100 percent reduces to 5 percent the percentage of 

contributors constrained by the limits.

The effect of increasing the dollar limit on contributions is fairly uniform across age groups and marital 

status/earner roles. Among income groups, the effect 

is limited to income groups above $40,000. Below 

that amount, virtually all taxpayers would arrive at 

the percentage-of-compensation limit before reaching the dollar limit, so increasing the dollar limit has 

no effect. In the highest two income groups, the 

percentage constrained drops by 3 or 4 points in 

response to the higher dollar limit—from 26 percent 

to 23 percent in the $120,000–$160,000 class and 

from 52 percent to 48 percent in the $160,000-andabove group.

Allowing $2,000 catch-up contributions affects only 

taxpayers in the two oldest groups of participants. 

The percentage constrained drops as a result of that 

provision by 3 points (from 11 percent to 8 percent) 

in the 45–59 group and by 4 points (from 13 percent to 9 percent) in the 60-and-over group. Among 

income groups, the effect is concentrated at the 

higher end of the scale; that is, where taxpayers who 

are constrained by the dollar limit are clustered in 

the first place. In the $120,000–$160,000 group, 

the constrained portion drops from 23 percent to 

18 percent; in the $160,000-and-above group, the 

percentage falls from 48 to 39. Among marital status/earner roles, the effect is greatest in the roles 

most commonly filled by men—sole earners and primary earners.

The effect of increasing to 100 percent the percentage-of-compensation limit is fairly uniform for all 

income groups. Unlike the other two changes, there 

is an effect at the low end of the income scale 

because the percentage-of-compensation limit is the 

only one that is ever binding on taxpayers in that 

range. The limit can still be binding among higherincome taxpayers, but only if most of their income is 

not in the form of wages. Among different age 

groups, increasing the limit has the greatest effect on 

the 60-and-over group, reducing the proportion 

constrained from 9 percent to 5 percent. Among 

marital status/earner roles, the effect is greatest 

among secondary earners, reducing the percentage 

constrained from 6 percent to 3 percent.

Overall, the EGTRRA changes reduce the percentage constrained in all age groups but particularly in 

the 60-and-over age group, for which the proportion 

declines from 14 percent to 5 percent. EGTRRA has 

the smallest effect in the 30–44 group; the percentage constrained drops by 2 points, from 8 percent to 

6 percent. The percentage constrained declines

10. This figure overstates the number actually constrained by 

statutory limits. Some participants in 403(b) plans and 

457 plans were permitted to make contributions in excess 

of the usual limits. In Utilization of Tax Incentives for 

Retirement Saving: An Update (2006), CBO imputed 

characteristics to taxpayers that allowed it to estimate the 

number of 403(b) and 457 plan participants who were 

constrained by the higher limits. Those imputations are not 

precise enough, however, to analyze the changes introduced 

by EGTRRA. Therefore, the analysis in this edition applies 

the 401(k) limits across the board in 2000 and 2003; it 

ignores the special provisions for 403(b) and 457 plan participants, and it does not consider the changes to those provisions included in EGTRRA. The result is that the 

percentages for 2000 in Tables 9 through 13 in this edition 

are incompatible with the corresponding percentages in 

Tables 4, 5, 6, 8, and 10 in the 2006 Update.
18

Table 10.

Participants Contributing the Maximum to

Traditional Individual Retirement Accounts, 1997, 2000, and 2003

(Percentage of participants)

Source: Congressional Budget Office tabulations of a sample of 1997, 2000, and 2003 individual income tax returns and tax 

information returns.

Notes: The income classifier is adjusted gross income plus excluded contributions to retirement plans less taxable distributions

from individual retirement accounts.

EGTRRA = Economic Growth and Tax Relief Reconciliation Act of 2001.

in every income group, but the effect is greatest at 

the high end of the income scale. In the $120,000–

$160,000 group, the figure falls from 26 percent to 

16 percent; in the $160,000-and-above group, it 

drops from 52 percent to 37 percent. In the 

$80,000–$120,000 income group, EGTRRA 

reduces the percentage constrained by more than 

half—from 12 percent to 6 percent—and it does so 

even at incomes below $40,000, where only 

1 percent were constrained to begin with. Although 

the effect of EGTRRA is substantial for every marital status/earner role, the percentage constrained 

among sole earners drops the most, from 15 percent 

to 8 percent. For unmarried participants and secondary earners, EGTRRA reduces the percentage by 

more than half—from 6 percent and 8 percent 

respectively, to 3 percent.

Category

Under 30 51 51 48 38 38

30 to 44 56 65 65 55 55

45 to 59 69 73 75 63 58

60 and Over 70 81 76 61 53

All Cohorts 62 70 71 59 55

Under $20,000 54 50 50 32 28

$20,000 to $40,000 57 56 56 38 33

$40,000 to $80,000 57 69 71 59 55

$80,000 to $120,000 71 78 81 74 71

$120,000 to $160,000 79 82 95 90 87

$160,000 and Over 86 97 97 95 87

All Income Groups 62 70 71 59 55

Unmarried Earners 62 67 66 52 49

Married Earners

 Sole 62 70 74 65 60

 Primary 62 72 74 61 56

 Secondary 63 71 71 60 57

All Earners 62 70 71 59 55

 Nonearning Spouse 62 72 78 70 66

By Income Group (1997 dollars)

By Marital Status/Earner Role

Law Dollar Cap Catch-Up Cap

By Age Cohort

1997 2000

2003

Pre-EGTRRA EGTRRA Plus EGTRRA
19

Traditional IRAs

In 2000, 70 percent of participants in traditional 

IRAs made contributions that were at the $2,000 

limit (see Table 10). Absent EGTRRA, the dollar 

limit would have been the same in 2003, and 71 percent of participants would have been constrained by 

the limit. Increasing the cap for all age groups to the 

EGTRRA limit of $3,000 reduces that figure by 

12 percentage points, to 59 percent. Increasing the 

limit by $500 for participants age 50 and older 

reduces it to 55 percent. EGTRRA reduces the constrained percentage of all eligible taxpayers (not just 

those who choose to participate) from 2.7 percent to 

2.1 percent.

The 1-percentage-point increase between 2000 and 

2003 in participants contributing $2,000 stands in 

distinct contrast to the 8-point increase between 

1997 and 2000. The difference is especially notable 

in two income groups: 

B The $40,000–$80,000 group increased by 

12 percentage points between 1997 and 2000 but 

only by 2 percentage points between 2000 and 

2003.

B The $160,000-and-above group had an increase 

of 11 percentage points between 1997 and 2000 

but no increase between 2000 and 2003.

The opposite phenomenon occurred in the 

$120,000–$160,000 group, with a 3-percentagepoint increase between 1997 and 2000 and a 13-percentage-point increase between 2000 and 2003.

The explanation lies largely in how eligibility to 

deduct contributions was phased out with income 

between 1997 and 2003. It is common for participants to contribute the maximum deductible 

amount, even though nondeductible contributions 

are allowed. In 1998, the income thresholds at 

which deductibility phased out increased substantially, particularly for married participants whose 

spouses were not covered by an employmentbased plan. In 2000, a much higher percentage of 

participants in the $40,000–$80,000 income group 

could deduct the full $2,000 than could in 1997; 

hence, a higher percentage actually contributed that 

amount. No similar increase in the threshold for 

married participants whose spouses were not covered 

by employment-based plans occurred between 2000 

and 2003; hence, the percentage contributing 

$2,000 increased only slightly. As for the highest 

income group, by 2000, 97 percent were contributing $2,000, so it was impossible for the increase 

between 2000 and 2003 to approach that from 1997 

to 2000.

In the lower income groups, the increased contribution limit of $3,000 results in a drop in the percentage of participants who contributed the maximum. 

Below $40,000, the drop is 18 percentage points; 

above $120,000, the drop is 5 percentage points or 

less. As would be expected, participants with less 

discretionary income are less able to increase contributions in response to the higher limit than are 

participants with more discretionary income. 

Among age groups, the biggest drop—15 percentage 

points—occurs in the 60-and-over group. Among 

marital status/earner roles, the biggest drop—

14 percentage points—occurs among unmarried 

participants. Both results are probably artifacts of 

the differential impact related to income.

Allowing taxpayers age 50 and over to make 

additional contributions of $500 reduces the percentage constrained only in the top two age groups: 

by 5 percentage points in the 45–59 group and by 

8 percentage points in the 60-and-over group. Differences among income groups and among marital 

status/earner roles resulting from catch-up contributions are negligible.

Overall, the EGTRRA changes reduce the constrained percentage in all age groups but particularly 

in the 60-and-over age group; there, the proportion 

declines from 76 percent to 53 percent. EGTRRA 

has the least effect in the under-45 groups; the constrained percentage drops only by 10 percentage 
20

Table 11.

Participants Contributing the Maximum to 

Roth Individual Retirement Accounts, 2000 and 2003

(Percentage of participants)

Source: Congressional Budget Office tabulations of a sample of 2000 and 2003 individual income tax returns and tax 

information returns.

Notes: The income classifier is adjusted gross income plus excluded contributions to retirement plans less taxable distributions

from individual retirement accounts.

EGTRRA = Economic Growth and Tax Relief Reconciliation Act of 2001; n.a. = not applicable.

points (from 65 percent to 55 percent in the 30–44 

group and from 48 percent to 38 percent in the 

under-30 group). The percentage also declines in 

every income group, but the effect is greatest at the 

low end of the income scale. In the under-$20,000 

group, the figure drops from 50 percent to 

28 percent, and in the $20,000–$40,000 group, it 

falls from 56 percent to 33 percent. At the high end 

of the income scale, the new limits are low enough 

that 87 percent or more of participants are still 

constrained by them. The effect of EGTRRA is substantial for every marital status/earner role. The biggest effect is seen among primary earners, among 

whom the percentage constrained drops from 74 to 

56. Nonearning spouses are the least affected, with 

the percentage dropping from 78 to 66.

Roth IRAs

In 2000, 62 percent of Roth IRA participants made 

contributions at the $2,000 limit (see Table 11). 

Category

Under 30 56 50 36 36

30 to 44 58 55 44 44

45 to 59 70 67 56 48

60 and Over 82 74 65 51

All Cohorts 62 60 48 44

Under $20,000 58 49 39 37

$20,000 to $40,000 50 50 37 35

$40,000 to $80,000 59 58 46 42

$80,000 to $120,000 73 71 59 54

$120,000 to $160,000 81 77 68 61

$160,000 and Over n.a. n.a. n.a. n.a.

All Income Groups 62 60 48 44

Unmarried Earners 61 57 46 44

Married Earners

Sole 69 70 60 55

Primary 61 57 44 40

Secondary 62 60 48 45

All Earners 62 60 48 44

Nonearning Spouse 72 70 57 52

2003

Pre-EGTRRA Law EGTRRA Dollar Cap Plus EGTRRA Catch-Up Cap

By Age Cohort

By Income Group (1997 dollars)

By Marital Status/Earner Role

2000
21

Absent EGTRRA, the limit would have remained 

the same in 2003, and 60 percent of participants 

would have been constrained by the limit. Increasing 

the cap for all age groups to the EGTRRA limit of 

$3,000 reduces that figure by 12 percentage points, 

to 48 percent. Increasing the limit by $500 for participants age 50 and up reduces it again, to 44 percent. Those percentage-point changes match the 

changes for the corresponding provisions when 

applied to traditional IRAs. EGTRRA reduces the 

constrained percentage of all taxpayers eligible to 

contribute to Roth IRAs (not just those who choose 

to participate) from 2.2 to 1.6.

The 2-percentage-point decline between 2000 and 

2003 in participants contributing at least $2,000 is 

an unexpected development without a clear explanation. The reduction occurred in all age groups, in all 

but one income group (the $20,000–$40,000 

group), and in all but one marital status/earner role 

(sole earners). The biggest declines occurred in the 

under-$20,000 income group (9 percentage points) 

and in the 60-and-over age group (8 percentage 

points). One possible explanation is that participants 

might have funded their Roth IRAs by transferring 

$2,000 of taxable savings into their accounts each 

year for as long as those savings were available. Once 

their transferable savings were exhausted, they would 

have had to fund the deposits out of current income, 

which might not have been sufficient to support a 

$2,000 contribution. In 2000, Roth IRAs were only 

in their third year of existence, so most participants 

would likely have been in the transfer-of-savings 

mode. By 2003, more would have exhausted available savings and begun to contribute smaller 

amounts out of current income. The stock market 

decline over the same period would have further hastened the exhaustion of taxable savings.

Increasing the annual limit on contributions to 

$3,000 does not reveal any interesting differences 

among age groups, income groups, or marital status/

earner roles. In every case the decline in the percentage constrained as a result of the higher contribution 

limit is between 9 and 14 percentage points.

Allowing taxpayers age 50 and over to contribute an 

additional $500 reduces the percentage constrained 

only in the top two age groups—by 8 percentage 

points in the 45–59 group and by 14 percentage 

points in the 60-and-over group. Among income 

groups, the decline is greater for higher-income 

groups, ranging from 2 percentage points for those 

with less than $40,000 of income to 7 percentage 

points for the $120,000–$160,000 group. The 

decline is greatest for one-earner married couples 

(5 percentage points for the sole earner and the nonearning spouse) and least for unmarried participants 

(2 percentage points).

Overall, the EGTRRA changes reduce the constrained percentage in all age groups but particularly 

in the 60-and-over age group, in which the percentage constrained declines from 74 to 51. EGTRRA 

has the least effect in the 30–44 group; there, the 

percentage drops by 11 points, from 55 percent to 

44 percent. The percentage also declines in every 

income group, but the effect is slightly greater at the 

high end of the income scale. In the under-$20,000 

group, it drops from 49 percent to 37 percent, and 

in the $120,000–$160,000 group, it drops from 

77 percent to 61 percent. The effect of EGTRRA is 

substantial for every marital status/earner role. It 

results in the constrained group shrinking by 13 to 

18 percentage points in 2003 and leaving the constrained percentage between 40 and 55 in every 

group.

Simplified Employee Pensions 

In 2000, SEP contributions were nominally limited 

to $30,000, or 15 percent of compensation. However, only $170,000 of compensation could be considered for employer contributions that are linked to 

compensation levels (the “countable compensation” 

cap), making the effective dollar cap $25,500. One 

or the other of those limits constrained 21 percent of 

participants (see Table 12). Without EGTRRA, 

those limits would not have changed in 2003, and 

the constrained group would have increased to 35 

percent. Increasing the countable compensation cap 

through EGTRRA to $200,000 increases the 
22

Table 12.

Participants Contributing the Maximum to Simplified Employee Pensions, 

2000 and 2003

(Percentage of participants)

Source: Congressional Budget Office tabulations of a sample of 2000 and 2003 individual income tax returns and tax 

information returns.

Notes: The income classifier is adjusted gross income plus excluded contributions to retirement plans less taxable distributions

from individual retirement accounts.

EGTRRA = Economic Growth and Tax Relief Reconciliation Act of 2001; n.a. = not applicable.

effective dollar cap to $30,000, but it has a minimal 

effect on the constrained percentage. Increasing the 

percentage-of-compensation limit to 25 percent, 

however, reduces the constrained percentage to 14.

Although increasing the countable compensation 

cap has a negligible effect on the constrained percentage overall, it does cause a 2-percentage-point 

reduction in the highest income group—the one in 

which almost everybody with compensation of 

$170,000 or more is found. As a result, 1-percentage-point drops in the constrained percentage can be 

observed among those age 45 and above, among 

unmarried participants, and among sole earners.

When the percentage-of-compensation limit 

is increased, the constrained percentage in the 

$20,000–$40,000 income group falls by 

Category

Under 30 7 18 18 5

30 to 44 17 27 27 12

45 to 59 26 39 38 15

60 and Over 32 49 48 20

All Cohorts 21 35 35 14

Under $20,000 27 40 40 22

$20,000 to $40,000 23 20 20 7

$40,000 to $80,000 17 30 30 12

$80,000 to $120,000 21 39 39 13

$120,000 to $160,000 25 40 40 13

$160,000 and Over 22 48 46 25

All Income Groups 21 35 35 14

Unmarried Earners 22 33 32 13

Married Earners

Sole 17 36 35 16

Primary 19 32 32 12

Secondary 26 40 40 17

All Earners 21 35 35 14

Nonearning Spouse n.a. n.a. n.a. n.a.

By Age Cohort

By Income Group (1997 dollars)

By Marital Status/Earner Role

2000

2003

Pre-EGTRRA Law

EGTRRA Countable

Compensation Cap

Plus EGTRRA

Percentage Cap
23

13 percentage points—the least of any income 

group. As one ascends the income scale, increasing 

the percentage-of-compensation limit reduces the 

constrained percentage in each income group by 

more than in the immediately lower income group, 

except for the highest group. That result differs from 

401(k) plans, for which imposing a percentage-ofcompensation limit had a fairly uniform effect 

across income groups. The explanation is that the 

percentage-of-compensation limit on SEPs acts as a 

dollar limit when combined with the countable 

compensation limit. With a countable compensation 

limit of $200,000, increasing the percentage-ofcompensation limit from 15 percent to 25 percent 

effectively increases the dollar limit from $30,000 to 

the statutory limit under EGTRRA of $40,000. In 

successively higher income groups, the proportion of 

participants constrained by the effective $30,000 cap 

on contributions is higher as well, resulting in more 

of them being freed from constraint when the 

$40,000 limit becomes effective. The effect is greatest in the oldest group, in which the constrained 

percentage drops by 28 percentage points. In the 

youngest group, there is a 13-percentage-point drop. 

Across marital status/earner roles, however, there is 

little difference in the drop in the constrained 

percentage.

Savings Incentive Match Plans for Employees

In 2000, employee contributions to SIMPLEs were 

limited to $6,000, or 25 percent of compensation. 

Employers could contribute another 3 percent of 

compensation, up to $6,000. Those constraints were 

binding on 9 percent of SIMPLE participants 

(mostly because employers did not contribute as 

much as they could have; see Table 13). Absent 

EGTRRA, the dollar limit would have increased to 

$6,500, and the constrained portion would have 

increased to 12 percent. Under EGTRRA, the general dollar limit increased to $8,000, reducing the 

constrained percentage to 8. Allowing $1,000 catchup contributions by participants age 50 and over has

a minimal effect on the constrained percentage. 

Increasing the percentage-of-compensation limit to 

100 percent reduces it to 3 percent.

The 3-percentage-point increase in constrained participants was concentrated almost entirely among 

secondary earners in two-earner married couples; the 

proportion of constrained participants increased by 

12 percentage points, from 8 percent to 20 percent. 

Those constrained under pre-EGTRRA law in 

2003 but not in 2000 also were overwhelmingly in 

the 60-or-above group and in one of the three highest income classes. The profile of the newly constrained participant is consistent with a woman who 

is approaching retirement, has a financially secure 

husband, and is prepared to dedicate more than 

25 percent of her compensation to retirement saving. The data are not sufficiently detailed, however, 

to confirm that participants fitting that profile were 

actually more common in 2003 than in 2000.

The increase in the general dollar cap to $8,000 

reduces the constrained percentage primarily in the 

highest income groups. At incomes above $80,000, 

the decline is 10 percentage points or more, reaching a maximum of 13 percentage points in the 

$160,000-and-above group. The dollar limit is high 

enough that, unlike IRA participants, most SIMPLE 

participants were not constrained before EGTRRA, 

and the higher-income participants can afford to 

contribute more when the limit is lifted. Among age 

groups, the drop in the constrained percentage 

ranged from 1 percentage point in the youngest to 

7 percentage points in the oldest. Among marital 

status/earner roles, the most pronounced drop—

7 percentage points—was for primary earners.

Allowing participants age 50 and over to make 

$1,000 catch-up contributions affects only the two 

oldest groups, but the effect is modest, never exceeding 2 percentage points. No distinct pattern emerges 

among income groups. Among marital status/earner 

roles, the decline is discernible only for two-earner 

couples.
24

Table 13.

Participants Contributing the Maximum to

Savings Incentive Match Plans for Employees, 2000 and 2003

(Percentage of participants)

Source: Congressional Budget Office tabulations of a sample of 2000 and 2003 individual income tax returns and tax 

information returns.

Notes: The income classifier is adjusted gross income plus excluded contributions to retirement plans less taxable distributions

from individual retirement accounts. Figures are not comparable to Table 10 in CBO’s Utilization of Tax Incentives for 

Retirement Saving: An Update (2006) because the limit on employer contributions was calculated differently.

EGTRRA = Economic Growth and Tax Relief Reconciliation Act of 2001; n.a. = not applicable.

Increasing the percentage-of-compensation limit 

from 25 percent to 100 percent produces the largest 

effect in higher-income groups. In the $160,000-

and-above group, for example, the drop is 11 percentage points; the average drop is 5 percentage 

points. That might seem odd when the 25-percentof-compensation limit could not be binding on a 

participant with $160,000 of compensation. The 

income groups, however, are defined based on AGI, 

which counts the income of both spouses. Thus, a 

secondary earner in the highest income group could 

be constrained by the percentage-of-compensation 

limit if the primary earner’s income were responsible 

for that classification. The 10-percentage-point 

decline in constrained participants who are, in fact, 

secondary earners bears out that explanation. 

Category

Under 30 2 4 3 3 1

30 to 44 8 9 6 6 2

45 to 59 13 17 12 10 4

60 and Over 12 25 18 17 8

All Cohorts 9 12 8 8 3

Under $20,000 4 8 7 7 3

$20,000 to $40,000 2 4 3 3 1

$40,000 to $80,000 5 9 7 6 2

$80,000 to $120,000 17 24 12 11 4

$120,000 to $160,000 19 30 20 19 10

$160,000 and Over 28 35 22 21 10

All Income Groups 9 12 8 8 3

Unmarried Earners 5 6 4 4 2

Married Earners

Sole 11 11 6 6 4

Primary 12 13 6 5 2

Secondary 8 20 17 16 6

All Earners 9 12 8 8 3

Nonearning Spouse n.a. n.a. n.a. n.a. n.a.

By Marital Status/Earner Role

By Age Cohort

By Income Group (1997 dollars)

2000 Percentage Cap

2003

Pre-EGTRRA Law

EGTRRA

Dollar Cap

Plus EGTRRA

Catch-Up Cap

Plus EGTRRA
25

Among age groups, the biggest decline—9 percentage points—was in the oldest group.

Overall, increasing the EGTRRA limits reduces the 

constrained percentage of secondary earners from 

20 percent (7 percentage points higher than any 

other marital status/earner role) to 6 percent—still 

higher than any other marital status/earner role. 

Among age groups, the pre-EGTRRA constrained 

percentage ranges from 4 percent in the youngest 

group to 25 percent in the oldest. EGTRRA reduces 

the constrained percentage in each age group by 

between 68 percent and 78 percent (compared 

with the 75 percent drop in the overall percentage 

constrained, from 12 percent to 3 percent). Among 

income groups, the pre-EGTRRA constrained 

proportions range from 4 percent in the $20,000–

$40,000 group to 35 percent in the $160,000-andabove group. The biggest decline attributable to 

EGTRRA—83 percent—is in the $80,000–

$120,000 group; the constrained percentage falls 

from 24 to 4. The biggest percentage-point decline, 

from 35 percent to 10 percent, is in the group with 

the highest income.

Appendix:

Average Contribution Amounts in Nominal Terms

Tables 5 through 8 of this paper show average contributions to 401(k)-type plans, individual retirement accounts (IRAs), and self-employed plans in 

1997 dollars. Using constant dollars made it easier to 

compare participant behavior across years by eliminating the effect of inflation. The practice does have 

some confusing aspects, however. For example, 

because the IRA contribution limit was not indexed 

for inflation between 1997 and 2000, and most contributors were constrained by the limit, average contributions measured in 1997 dollars actually 

declined over that period. Furthermore, the contribution limits are expressed in nominal terms, making it difficult to determine how average contributions measured in 1997 dollars compare with those 

limits. Therefore, Tables A-1 through A-4 have been 

included here as nominal counterparts to Tables 5 

through 8 of the main text.
28

Table A-1.

Workers’ Average Nominal Contributions to 401(k)-Type Plans, 

1997, 2000, and 2003

Source: Congressional Budget Office tabulations of a sample of 1997, 2000, and 2003 individual income tax returns and tax 

information returns. 

Notes: The income classifier is adjusted gross income plus excluded contributions to retirement plans less taxable distributions

from individual retirement accounts.

n.a. = not applicable.

Category

Under 30 6,128 1,592 6,102 2,008 5,611 1,951

30 to 44 16,288 2,681 16,868 3,208 16,635 3,519

45 to 59 11,360 3,466 13,164 3,847 15,094 4,469

60 and Over 1,889 3,213 2,092 3,577 2,916 4,337 _______ _______ _______

All Cohorts 35,666 2,772 38,226 3,257 40,257 3,716

Under $20,000 2,448 546 2,611 680 2,976 726

$20,000 to $40,000 8,331 1,324 8,248 1,498 8,806 1,583

$40,000 to $80,000 14,718 2,482 15,112 2,822 15,753 3,162

$80,000 to $120,000 6,310 4,131 7,019 4,549 7,511 5,287

$120,000 to $160,000 1,958 5,360 2,561 6,116 2,741 7,476

$160,000 and Over 1,902 7,054 2,675 7,522 2,470 9,503 _______ _______ _______

All Income Groups 35,666 2,772 38,226 3,257 40,257 3,716

Unmarried Earners 12,404 2,190 13,591 2,624 14,463 2,891

Married Earners

Sole 5,147 3,580 5,055 4,160 6,318 4,787

Primary 10,973 3,398 11,801 3,978 11,798 4,550

Secondary 7,141 2,239 7,779 2,680 7,678 3,105 _______ _______ _______

All Earners 35,666 2,772 38,226 3,257 40,257 3,716

Nonearning Spouse n.a. n.a. n.a. n.a. n.a. n.a.

1997 2000 2003

Number of Number of Average

Participants

(Thousands)

Average

Contribution

(1997 dollars)

Participants Contribution

Number of Average

Participants Contribution

By Age Cohort

By Income Group (1997 dollars)

By Marital Status/Earner Role

(Thousands) (Thousands) (2000 dollars) (2003 dollars)
29

Table A-2.

Workers’ Average Nominal Contributions to Individual Retirement Accounts, 

1997, 2000, and 2003

Source: Congressional Budget Office tabulations of a sample of 1997, 2000, and 2003 individual income tax returns and tax 

information returns.

Note: The income classifier is adjusted gross income plus excluded contributions to retirement plans less taxable distributions 

from individual retirement accounts.

Category

Under 30 1,020 1,407 1,772 1,477 1,452 1,704

30 to 44 2,815 1,530 3,800 1,580 3,213 1,986

45 to 59 2,971 1,675 4,189 1,676 4,166 2,421

60 and Over 1,012 1,713 1,099 1,778 1,214 2,576 ______ ______ ______

All Cohorts 7,818 1,593 10,860 1,620 10,045 2,197

Under $20,000 925 1,428 1,197 1,452 1,156 1,689

$20,000 to $40,000 2,062 1,513 2,236 1,497 2,160 1,962

$40,000 to $80,000 2,631 1,520 3,736 1,593 3,688 2,181

$80,000 to $120,000 1,012 1,741 2,055 1,744 1,810 2,444

$120,000 to $160,000 517 1,863 911 1,771 690 2,635

$160,000 and Over 670 1,915 727 1,879 540 2,941 ______ ______ ______

All Income Groups 7,818 1,593 10,860 1,620 10,045 2,197

Unmarried Earners 2,833 1,549 3,820 1,555 3,508 2,027

Married Earners

Sole 1,444 1,626 1,684 1,683 1,663 2,467

Primary 1,878 1,613 2,673 1,657 2,443 2,240

Secondary 1,663 1,615 2,683 1,637 2,431 2,214 ______ ______ ______

All Earners 7,818 1,593 10,860 1,620 10,045 2,197

Nonearning Spouse 1,142 1,583 1,466 1,670 1,319 2,489

By Age Cohort

By Income Group (1997 dollars)

By Marital Status/Earner Role

Participants Contribution

(Thousands) (1997 dollars) (Thousands) (2000 dollars) (Thousands) (2003 dollars)

Participants Contribution Participants Contribution

1997 2000 2003

Number of Average Number of Average Number of Average
30

Table A-3.

Workers’ Average Nominal Contributions to

Traditional or Roth Individual Retirement Accounts, 2000 and 2003

Source: Congressional Budget Office tabulations of a sample of 2000 and 2003 individual income tax returns and tax 

information returns.

Notes: The income classifier is adjusted gross income plus excluded contributions to retirement plans less taxable distributions

from IRAs.

IRA = individual retirement account; n.a. = not applicable.

Category

Under 30 1,229 1,486 1,546 1,683

30 to 44 1,468 1,565 1,897 1,940

45 to 59 1,587 1,678 2,309 2,361

60 and Over 1,754 1,660 2,475 2,454

All Cohorts 1,544 1,585 2,166 2,071

Under $20,000 1,373 1,421 1,684 1,558

$20,000 to $40,000 1,437 1,420 1,917 1,841

$40,000 to $80,000 1,471 1,594 2,088 2,090

$80,000 to $120,000 1,638 1,731 2,323 2,413

$120,000 to $160,000 1,680 1,752 2,745 2,428

$160,000 and Over 1,897 n.a. 2,966 n.a.

All Income Groups 1,544 1,585 2,166 2,071

Unmarried Earners 1,462 1,518 1,970 1,934

Married Earners

Sole 1,620 1,629 2,399 2,328

Primary 1,587 1,633 2,239 2,082

Secondary 1,549 1,626 2,174 2,125

All Earners 1,544 1,585 2,166 2,071

Nonearning Spouse 1,593 1,663 2,483 2,308

(2003 dollars)

2000 2003

 Traditional Roth Traditional Roth

By Age Cohort

By Income Group (1997 dollars)

By Marital Status/Earner Role

IRAs IRAs IRAs IRAs

(2000 dollars) (2000 dollars) (2003 dollars)
31

Table A-4.

Workers’ Average Nominal Contributions to

Self-Employed Retirement Plans, 1997, 2000, and 2003

Source: Congressional Budget Office tabulations of a sample of 1997, 2000, and 2003 individual income tax returns and tax 

information returns.

Note: The income classifier is adjusted gross income plus excluded contributions to retirement plans less taxable distributions 

from individual retirement accounts.

n.a. = not applicable.

Category

Under 30 24 4,675 28 5,505 29 7,481

30 to 44 469 8,050 476 8,476 376 12,330

45 to 59 546 8,211 657 9,745 652 14,637

60 and Over 121 8,612 172 8,225 217 14,006 ______ ______ ______

All Cohorts 1,159 8,115 1,332 9,007 1,274 13,685

Under $20,000 32 2,245 39 2,057 35 3,099

$20,000 to $40,000 93 2,665 98 2,959 97 4,021

$40,000 to $80,000 269 4,098 319 4,316 260 6,314

$80,000 to $120,000 242 6,360 268 5,821 268 8,940

$120,000 to $160,000 145 9,433 156 9,110 170 13,315

$160,000 and Over 340 14,578 453 16,058 443 23,977 ______ ______ ______

All Income Groups 1,159 8,115 1,332 9,007 1,274 13,685

Unmarried Earners 223 7,290 273 8,000 253 14,505

Married Earners

Sole 290 11,311 296 13,063 284 18,601

Primary 377 9,812 443 10,775 411 16,265

Secondary 268 2,960 320 3,654 327 5,536 ______ ______ ______

All Earners 1,159 8,115 1,332 9,007 1,274 13,685

Nonearning Spouse n.a. n.a. n.a. n.a. n.a. n.a.

By Age Cohort

By Income Group (1997 dollars)

By Marital Status/Earner Role

Participants Contribution

(Thousands) (1997 dollars) (Thousands) (2000 dollars) (Thousands) (2003 dollars)

Participants Contribution Participants Contribution

1997 2000 2003

Number of Average Number of Average Number of Average